The New Greek Government Refuses to Agree to Unpayable Debts

The Syriza coalition is not just pushing for a better deal—it is saying no to a self-destructive game.

February 12, 2015

Syriza supporters gather in front of Greece’s Parliament to back its demands of a bailout debt renegotiation on February 11, 2015. (AP Photo/Yorgos Karahalis)

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At times the conflict between Greece and the rest of the Eurozone looks like a duel to the death. Last night, a seven-hour meeting of Europe’s finance ministers about Greece’s immediate funding needs ended in tetchy silence. There was no common statement; there wasn’t even (to borrow Greek Finance Minister Yanis Varoufakis’s phrase after his meeting last week with Germany’s Wolfgang Schaeuble) an agreement to disagree. On Twitter, Greece-watchers tried to come up with ways to marry Greece’s request for a bridge loan with the Eurozone’s insistence on an extension to the bailout memorandum, which the new governing party Syriza has promised to repudiate. Pier? Pontoon? Causeway? Schrödinger’s memorandum, simultaneously dead and alive?

Semantics will play an important part in any eventual solution, which will involve compromises and face-saving wording for both sides. But semantics can’t be all of it—something the Eurozone ministers may not yet have understood. The Syriza government is not just pushing for a better deal—they’re refusing to keep on playing the same self-destructive game, piling debt on unpayable debt tied to impossible conditions. The aim is to reclaim democracy and political possibility—and with them, human lives—from the failed and fatal dogmas of austerity. In this they are backed by 70 percent of the Greek people, twice the proportion that voted for them. Eighty percent also want to stay in the eurozone. The desire—perhaps quixotic, perhaps grandiose, but born of suffering and necessity—is not to abandon Europe but to change it.

Like well-trained organizers, Syriza’s leaders are being the change they want to see. Their sartorial rebellion signals urgency, the rejection of business as usual, a commitment to fundamentals over precedent and procedure. The disjunction between their language and that of the old politicians is startling and refreshing. In Berlin on Thursday, Finance Minister Schaeuble spoke of rules and tax inspectors; Varoufakis, tieless as usual, addressed Europe’s post-war project, offering “a frenzy of reasonableness” and deep reform at home, while describing the damage done to Europe, as well as to Greece. Germany, he said, more than any other nation, must understand how “a severely depressed economy, combined with a ritual national humiliation and unending hopelessness,” can hatch the serpent’s egg: the third-largest party in the Greek Parliament is now a Nazi party. Speaking as an equal partner, he requested not money and indulgence but political space and time.

In Greece, too, political reality seems to have been stood on its head. In a Parliament presided over by a young female speaker, Syriza’s new ministers put forward ambitious programs as if no storm was raging in the capitals of the north, threatening bankruptcy. Immediate help for families worst hit by the depression, an end to the culture of corruption and clientelism, investigation of tax evaders, a new public broadcaster funded from tax receipts, collective bargaining restored with help from the International Labour Organization, a new ministry for migration and citizenship for second-generation immigrants, civil partnerships for gay couples, a reformed, independent justice system… the lists went on, as if to say, whatever Europe does or doesn’t do, we are now resolved to determine our own fate.

Apart from new Prime Minister Alexis Tsipras, of the ministers I heard only Varoufakis spoke of the ongoing negotiations, with the candor of a man who believes that even in politics reason is bound to triumph. Like the child who points out the Emperor’s nakedness in Andersen’s fairy tale, he swept aside the myth on which the eurozone has run since the financial crisis broke: “The so-called medicine is toxic—and the worst thing is that the prescribing doctor knows it. But he is committed to keep giving it to us, even though he knows and admits in private that it does harm, not good. The notion that a country without fundamental trust in the banks, with its productive infrastructure ruined, with its workers immiserated, unemployed, unpaid, can produce primary surpluses of 4.5 percent makes any economist shake his head in disbelief. The Troika recognizes it too, accepts it when the microphones are off—but not when they are on.”

There’s a tremendous relief, for very many Greeks, in hearing a government minister speak those truths at last. It’s of a piece with the feeling in the days after the election, shared also by many who did not vote for Syriza, that something had been lifted: a political culture of concealment, doublethink and lies, the dead weight of a government out of touch with reality and at odds with the population. The metal barriers protecting the Parliament from the people were quickly taken away; the busloads of riot police stationed around the city center vanished.

During Thursday’s Eurogroup meeting thousands of people gathered in Syntagma Square not to protest but to support the government; there were solidarity demonstrations in many other Greek and European cities, and more are planned for Sunday under the hashtag #mazi, the Greek word for together. Some Greek commentators are shaking their heads at what they see as a dangerous outbreak of nationalist self-importance, but they are missing the point. Syriza’s rhetoric—and Greek political culture—has a strong nationalist streak, which could easily be played up if things begin to go wrong. But what we’re seeing now is something simpler and more universal: the hunger to have a voice, to be heard, to matter.

The Syriza government will have considerable leeway, with the voters at least, in its negotiations with the country’s creditors. After five years of crisis, most people have pretty limited expectations. Before the election, the word on the street was “If they do two or three of the ten things they’ve promised, I’ll be happy.” That may not be so true inside the party: Tsipras is holding together a broad political spectrum, from far left to cente left, and there are already rumors of disagreements and ructions, for instance on privatizations. But in the last two weeks Varoufakis has, among other things, softened the demand for a debt haircut and said that the government will stick to seventy percent of the old bailout conditions, offering new reforms worked out with the OECD in lieu of the other thirty. These things have not inspired cries of betrayal at home.

Some things, though, will have to be non-negotiable. There has to be a visible way out of the debt trap; humanitarian relief; respect for Greece as an equal partner in Europe; and, perhaps hardest of all, respect for the democratic right to elect a left-wing government in the Eurozone. Syriza’s economic program is neither fully paid for nor entirely feasible, but the principles—which wouldn’t have seemed remotely radical twenty years ago—must remain intact: workers’ rights to organize for better pay and conditions; a living wage for all and equal pay for equal work; progressive (and effective) taxation; social security and support for those who need it. The difference between a “bridge” and an “extension” may be purely semantic, a face-saving contest between Greece and its creditors. But, like the clothes politicians wear, such things can also stand for matters of real substance: what Europe can or wants to be and, ultimately, whether it will or should survive.